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MEMORANDUM <br />DATE: May 15, 2009 <br />TO: Mayor and Councilmembers <br />FROM: Mike Morrison, City Manager <br />Roger Larson, Finance Director <br />ITEM: MARKET VALUE CREDIT/2009 BUDGET CUTS <br />To help balance the State of Minnesota's budget deficit, the Governors proposal includes <br />cutting Local Government Aid and Market Value Credit to Minnesota Cities by 5.05 %. <br />If approved by the Legislature, the impact to St. Anthony would be a loss in Market <br />Value Credit of $133,200 (the City has not received LGA since 2002). <br />Anticipating the loss in Market Value Credit, the City Council directed Staff to examine <br />their budgets and provide input on how to remove $135,000 from the budget. <br />At the February 4a' work session, Staff presented the removal of the Sewer Jetter from the <br />Capital Equipment Budget ($150,000). Council expressed concern that it was not fair or <br />prudent to penalize only the Public Works Department and wanted Staff to look at all <br />areas of the budget. <br />At the March 315` work session, Staff presented four options to the City Council: <br />Option #1 - Cut the Capital Equipment Budget by $135,000 <br />Option #2 - Cut the General Operating Budget by $135,000 <br />Option #3 - Increase Taxes /Liquor Revenues by $135,000 <br />Option #4 - Combination of Options #1, #2 and #3 <br />At that meeting, the City Council directed Staff that the cuts should affect all <br />Departments and could came from a combination of reductions to the General Operating <br />and Capital Equipment Budgets. Their direction included goals to maintain the same <br />level of service, evaluate the efficiency of operations and the need to define the risks <br />associated with the cuts. <br />At the May 46 work session Staff presented its recommendations which included <br />reducing the General Operating Expenditures by $52,700 and cutting or deferring Capital <br />Equipment purchases by $82,300. <br />A summary of the cuts is as follows: <br />1) General Government <br />2) Police <br />3) Fire <br />4) Public Works <br />Total <br />General <br />Capital <br />Operating Budget <br />Equipment <br />$15,300 <br />$18,300 <br />$11,000 <br />$30,000 <br />$ 7,100 <br />$27,000 <br />$19,300 <br />$ 7,000 <br />$52,700 <br />$82,300 <br />1 <br />